Article
Introduction
“Competitive strategy is about being different. It means deliberately choosing different activities to deliver a unique mix of value. – (1999) (2000) defined competitive strategy as the “combination of the ends or goals for which the firm is striving and the means or policies by which it is seeking to get there”. For , competitive strategy is composed of five forces; incumbent firms, potential entrants, substitute products, suppliers, and customers. The last four forces collectively create “extended rivalry which goes beyond” the rivalry inside the industry. (1993)
Position
The author,, do not agree with Porter’s analysis on competitive strategy. But upon closer look at Porter’s competitive strategy framework, there is more than the five forces on industry growth rates that is being considered in achieving success. The five forces in the approach are merely the baselines and beneath them are several concepts that are important for an entrepreneur. Pfeffer’s view that “industry location” cannot ensure progress and development for the company is not wholly correct. Conventional wisdom is not enough to predict the market share and industry growth. It may be able to jumpstart a business endeavor, but it will not suffice to allow the company to survive competition in the industry.
South West is known for its excellent customer service, and this strategy did not simply come out of nowhere. The efficiency of customer service will have to depend on how other airlines are serving their company. And customers are one of the forces in Porter’s competitive strategy. Offering lower fare rates and not being able to serve larger airports may also be considered as part of the competitive strategy of South West to be able to survive competition. How South West could have known how low their fares should be without knowing the prices and fare rates of other airlines. This strategy of lowering fare rates can be placed under Porter’s force of threat of substitute. Even the Les Schwab Tire Center focuses on customer satisfaction is a competitive strategy the same as South West’s strategy. Whole Foods’ competitive strategy of providing quality products can also be placed in Porter’s five forces, under the threat of substitute products and suppliers. They make sure that they get the good products and that they are able to control the suppliers in giving them the good harvests.
Innovativeness is essential to survive competition in any industry. One cannot simply rely on common sense, in order to succeed, certain knowledge and skills are needed. Statistics and research, although not limited to these two, are very important for a business venture to succeed. This is important in determining what innovations may be created to be able to enter an industry.
Conclusion
Porter’ Competitive Strategy may have been written in a time when the globalization has not dominated the economic policies and discussion but that does not mean that it would now be inapplicable in today’s world. Frameworks are created too serve as guidelines and models but the interpretation should not stop in the time they are written. Porter’s approach is still useful in the present time; only, interpretations should be broadened to accommodate the changes. As Porter said, different activities for a unique mix of value, modified interpretation for the ever changing times.
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